TO POLICYHOLDERS AND INTERESTED PERSONS

INCLUDING SUMMARY OF REHABILITATION PLAN,

NOTICE REGARDING CONFIRMATION HEARING

APRIL 22, 1992

Fidelity Bankers Life Insurance Company

Index to Second Report
to Policyholders and Interested Persons

(NOTE: The term "policyholder" is used interchangeably with "contract-holder" throughout this report).

STEVEN T. FOSTER COMMISSIONER OF INSURANCE

Box 1157 RICHMOND, VA 23209 TELEPHONE: (804) 786-3741 TDD/VOICE: (804) 225-3806

April 22, 1992

 

TO: Policyholders of Fidelity Bankers Life Insurance Company
and Persons Interested in its Affairs

Re: REHABILITATION AND CLASS LITIGATION

Dear Sir or Madam:

As you know from the July 8, 1991 REPORT TO POLICYHOLDERS AND INTERESTED PERSONS, in order to prevent its condition from becoming hazardous to policyholders, on May 13, 1991, the Circuit Court for the City of Richmond, Virginia, entered its order appointing the State Corporation Commission for the Commonwealth of Virginia (the "Commission") Receiver of Fidelity Bankers Life Insurance Company ("Fidelity Bankers" or the"Company") for purposes of conservation and rehabilitation. On that day, the Commission entered its Order Appointing Deputy Receiver for Conservation and Rehabilitation ("the Receivership Order") appointing Steven T. Foster, Commissioner of Insurance, as Deputy Receiver of Fidelity Bankers. On that same day, I appointed Patrick H. Cantilo, of the law firm of Rubinstein & Perry, LLP, as Special Deputy Receiver of Fidelity Bankers.

As part of a Rehabilitation Plan for Fidelity Bankers ("the Plan"), a tentative agreement has been reached with the Hartford Life Insurance Company ("Hartford") pursuant to which Hartford is willing to assume and reinsure the contracts and policies of Fidelity Bankers currently in force. A summary regarding the Plan may be found at pages 9 through 27 for your

By now policyholders may have received a document entitled "NOTICE OF CLASS CERTIFICATION AND PROPOSED SETTLEMENT" (the "Class Notice") in two lawsuits (the "Class Litigation") styled:

Judicial Council Coordination Proceeding No. 2609; Coordination Proceeding Special Title (Rule 1550(b)); First Capital Holdings Cases; in the Superior Court for the State of California in and for the County of San Diego; and

MDL Docket No. 901; In Re First Capital Holdings Corporation Financial Products Securities Litigation; in the United States District Court, Central District of California.

The Class Notice was sent to policyholders regarding litigation in which the Deputy Receiver of Fidelity Bankers has not been a party. The officials appointed by the Commission to manage the affairs of Fidelity Bankers for the protection of its policyholders and creditors did not participate in the negotiation of the Proposed Settlement or in the preparation of the Class Notice.

While policyholders may wish to consult their own legal and financial advisers regarding what, if any, role they can or should play in the Class Litigation, I make the following observations in the hope that they will be of help.

1. I have been advised that the Class Notice might be interpreted as advising policyholders that, if they did not agree to become a part of the Plaintiffs' Class, they could not participate in any rehabilitation plan for Fidelity Bankers. Such interpretation appears to be based in part on the language appearing at page 4 of the Class Notice which states in part:

If you validly request exclusion from the class...you may not participate in or benefit from any court-approved plan of rehabilitation or its equivalent for...FBL....

We have also been advised that this Class Notice was followed by a SUMMARY NOTICE by publication in national newspapers which reads, in part:

If you validly request exclusion from the Class, a) you will be excluded from the Class, b) you will not share in the proceeds of the settlement described herein, c) you will not be bound by any judgment entered in the Actions, and d) you will not be precluded, by reason of your decision to request exclusion from the Class, from otherwise prosecuting an individual claim, if timely, against the Settling Defendants based on the matters complained of in the Actions. If you subsequently choose to participate in any Court approved plan of rehabilitation and you have requested exclusion from the Class, however, you will thereby invalidate your election to be excluded from the Class and will automatically become a member of the Class.

Policyholders should be advised that these are not my positions. To the contrary, it is our position that benefits available to policyholders under the proposed Plan are not contingent upon their participation in the Class described in the Class Notice. Nor, for that matter, is it the position of the Deputy Receiver that their election to participate in the Rehabilitation Plan requires that policyholders become a member of the Class.

Given the information of which we are aware, it seems reasonable, for example, that a Fidelity Bankers policyholder might wish to participate in the Plan but would not wish to become a member of the Class and thereby deprive himself or herself of the ability to assert personal causes of action against those who are Defendants in the Class Litigation in the hope of recovering some portion of his or her damages. Similarly, such a policyholder might wish to participate in the Plan without depriving the Deputy Receiver of the ability to pursue claims against those Defendants for damages suffered as the result of such Defendants' actions or omissions. Policyholders should know that the Deputy Receiver has commenced litigation in Virginia against some of the same individuals who are Defendants in the Class Litigation in the hope of recovering amounts that could be used to benefit policyholders and creditors of Fidelity Bankers. We believe that the Class Litigation may interfere substantially with the litigation commenced by the Deputy Receiver.

The Plan and the Class Litigation are, in our view, independent of one another. We have communicated with the lawyers representing the Plaintiffs in the Class Litigation ("Class Counsel") in an effort to resolve this controversy and have made our position known to the Courts in California. Policyholders should know, however, that these efforts have thus far not resulted in a clear resolution of the dispute. Class Counsel thus far adamantly assert that they are legally entitled to represent the interests of Fidelity Bankers' policyholders in the Class Litigation, at least with respect to such policyholders' personal causes of action. As more fully explained below, it appears that current policyholders of Fidelity Bankers receive nothing of value as a result of such representation.

2. From review of the Class Notice, it appears that the benefits to be conferred on policyholders of Fidelity Bankers under the proposed settlement are as follows:

a. The Class Notice might be deemed to imply, but does not state, that policyholders who surrendered their Fidelity Bankers contracts "for surrender charges" during the period from January 1, 1990 through May 13, 1991 may reinstate such contracts. Policyholders should know, however, that Fidelity Bankers has made no such arrangements and that the proposed Plan does not contemplate such reinstatement. It is therefore difficult to understand to what the Class Notice refers in this instance or how such reinstatement might be available. It is possible that the Class Notice is simply unclear on this point and that the proposed settlement does not in fact contemplate reinstatement of Fidelity Bankers' contracts.

b. Policyholders of Fidelity Bankers (and of First Capital Life Insurance Company) who surrendered their contracts "for surrender charges" during the period from January 1, 1990 through May 13, 1991 and who choose not to reinstate such contracts may participate pro rata in a $3 million settlement fund to be established by the Defendants.

c. Current policyholders of Fidelity Bankers who are members of the Class (as defined on the first page of the Class Notice) may participate in the Rehabilitation Plan for Fidelity Bankers. We hasten to point out that the proposed Plan described herein has been developed by a rehabilitation team which was established by the Deputy Receiver of Fidelity Bankers without assistance from, or participation by, the lawyers and parties involved in the Class Litigation. More importantly, it is the position of the Deputy Receiver, and the position of the Fidelity Bankers rehabilitation team, that Fidelity Bankers' policyholders may participate in the proposed Rehabilitation Plan without regard to any decision they make as to the Class Litigation. In effect, therefore, this supposed benefit of participation in the Class is available to policyholders even if they do not participate in the Class. In fact, the availability of this Plan to Fidelity Bankers' policyholders is not even the partial result of the Class Litigation.

Our review of the Class Notice does not reveal any benefits available as a result of the Class Litigation for current policyholders of Fidelity Bankers, despite the fact that the proposed settlement requires such policyholders to give up the claims allegedly asserted on their behalf.

In exchange for the benefits described in the Class Notice and summarized above, members of the Class (including Fidelity Bankers' policyholders electing to become members of the Class) would be deemed to have agreed to release and give up any of the "Settled Claims" (as identified in the Class Notice) that they may personally have against the Defendants or which could become a part of the claims asserted in the Class Litigation. As part of the Class Litigation, the members of the Class would further agree that Class Counsel can receive from the Defendants fees and costs set forth in the Class Notice as totalling $8 million.

Thus, apart from the Rehabilitation Plans, we interpret this Class Notice as providing that the Defendants will pay $11 million, of which $3 million will be available for certain claims of certain former policyholders of Fidelity Bankers and First Capital Life Insurance Company, and $8 million will go to the lawyers representing the Class.

We note further that the Class Notice required that any objection or opposition be made in writing and filed no later than April 14, 1992, in the manner described in the Class Notice.

YOU SHOULD READ THE ENTIRE CLASS NOTICE AND ANY SUBSEQUENT OR AMENDED CLASS NOTICES CAREFULLY AND CONSULT WITH YOUR OWN ADVISERS AND ATTORNEYS REGARDING THEIR PROVISIONS. NOTHING HEREIN IS INTENDED TO BE LEGAL ADVICE OR A COMPREHENSIVE ANALYSIS OF THIS COMPLICATED DOCUMENT. ONLY CERTAIN PROVISIONS OF THIS LENGTHY CLASS NOTICE ARE DISCUSSED IN THIS LETTER.

At this point, I cannot recommend any particular action with respect to the Class Litigation and, specifically, cannot recommend that you participate in or become a member of the Class. More importantly, our attorneys have been unable to discern from the Class Notice any benefit that would be conferred on current Fidelity Bankers policyholders in exchange for the substantial concession that such settlement would require from them.

However, and in keeping with my desire to fully protect policyholders best interests, I asked the law firm of Rubinstein & Perry, LLP, which I retained to assist in the affairs of Fidelity Bankers, to take appropriate steps to protect the interests of Fidelity Bankers' policyholders as best they could under the circumstances. In keeping with that request, on April 8, 1992, they filed legal papers in the Class Litigation objecting to the proposed settlement and seeking permission to intervene for the limited purpose of asking that the Class Litigation be dismissed as to Fidelity Bankers policyholders.

In addition, Rubinstein & Perry, LLP advised the Plaintiffs' lawyers in the Class Litigation that, to the extent I legally represent policyholder's rights, I requested that Fidelity Bankers policyholders be excluded from the Class Litigation and the proposed settlement.

I hope that these measures will have helped avoid what we perceive as adverse results of this Class Litigation for Fidelity Bankers policyholders.

I am truly pleased to be able to advise you of our proposed rehabilitation plan. I regret any harm or confusion caused by the Class Notice and pending litigation but hope that the measures and information described above can be of help to you.

Very truly yours,

Steven T. Foster

Deputy Receiver

EXHIBIT "2"

COMMONWEALTH OF VIRGINIA

TO: ALL POLICYHOLDERS, CONTRACT-HOLDERS, CREDITORS, AND OTHER PERSONS INTERESTED IN FIDELITY BANKERS LIFE INSURANCE COMPANY, In Receivership for Conservation and Rehabilitation:

On April 22, 1992, the State Corporation Commission entered its Order in the above captioned case, which Order provides, among other things, as follows:

1. The Deputy Receiver has filed his Summary of Rehabilitation Plan for Fidelity Bankers Life Insurance Company, In Receivership for Conservation and Rehabilitation ("Fidelity Bankers") with the State Corporation Commission (the "Commission"). The summary describes a plan for the rehabilitation of Fidelity Bankers (the "Rehabilitation Plan"). The complete Rehabilitation Plan will be filed with the Commission on or before May 1, 1992. Upon written request to the Special Deputy Receiver, complete copies of the Rehabilitation Plan shall be made available by Fidelity Bankers at a cost of twenty cents ($0.20) per page after May 1, 1992.

2. A Confirmation Hearing for the consideration and requested approval of the Rehabilitation Plan is set for Monday, June 1, 1992, at 10:00 a.m. in the Commission's Courtroom, 13th Floor, Jefferson Building, Bank and Governor Streets, Richmond, Virginia.

3. At the Confirmation Hearing, the Commission will consider the merits of the Fidelity Bankers Rehabilitation Plan, and all related matters. The Rehabilitation Plan includes an Agreement of Intent which requires Hartford Life Insurance Company ("Hartford") to assume all of Fidelity Bankers policies and contracts of insurance.

4. As a part of the Rehabilitation Plan, the Deputy Receivers propose to mutualize Fidelity Bankers, upon a finding by the Commission that such action is in the best interests of policyholders and other creditors and that it compensates the shareholder for its equity interest in the Company, if any. Upon such findings, the Deputy Receivers have requested that the Commission approve, ratify, and adopt a mutualization proposal which will retire and cancel all stock issued by Fidelity Bankers.

5. On related matters, the Commission will consider proposals to: find Fidelity Bankers insolvent as of May 13, 1991, establish a liquidation value of the rights held by the Company's policyholders and contract-holders, and fix the rights of interested parties; establish a claims Bar Date, authorize the Deputy Receivers to draft appropriate proof of claim forms to fix, approve, deny, and reject claims against Fidelity Bankers/Fidelity Bankers Trust; modify and restructure contracts and policies; and establish a Fidelity Bankers Trust and criteria for its use.

6. That on or before 10:00 a.m. on Friday, May 15, 1992, all persons who desire to appear at the Confirmation Hearing for the purpose of opposing the proposed Rehabilitation Plan, by presenting a bid which may seek to compete with or improve upon the Rehabilitation Plan and/or the proposed agreement with Hartford, or otherwise, shall file with the Commission a Notice of Protest which shall contain a precise statement of the interest of the party filing such notice.

7. That on or before 10:00 a.m. on Wednesday, May 20, 1992, all persons who have timely filed a Notice of Protest in accordance with paragraph 6. above, and who still desire to participate in the hearing as party Protestants, shall file with the Commission fifteen (15) copies of the prepared testimony and exhibits of each witness expecting to present direct testimony for the purposes set forth in paragraphs 2. and 3. above. Not later than the filing of the aforesaid testimony and exhibits, all persons who have timely filed a Notice of Protest shall file with the Commission a Protest which shall contain a precise statement of the interest of the Protestant in the proceeding; a full and clear statement of the facts which the Protestant is prepared to prove by competent evidence, the proof of which will warrant the relief sought; and a statement of the specific relief sought and the legal basis therefor.

8. All Notices of Protest, Protests, pre-filed testimony and exhibits and other Pleadings or other related documents shall be deemed filed with the Commission upon receipt of the original and fifteen (15) copies thereof by the Clerk of the Commission at the following address: State Corporation Commission, Document Control Center, 1220 Bank Street, Richmond, Virginia 23209; and service of complete copies of any required filing shall also be made upon the Special Deputy Receiver at Fidelity Bankers Life Insurance Company, In Receivership for Conservation and Rehabilitation, 1011 Boulder Springs Drive, Richmond, Virginia 23225, on or before the dates and times required above.

9. These proceedings before the Commission shall be subject to the Commission's Rules of Practice and Procedure to the extent not modified by order of the Commission.

 

Dated this 22nd day of April, 1992.

 

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INTRODUCTION

The Deputy Receiver and the Special Deputy Receiver (the "Deputy Receivers") established a team of experts and consultants (the "Rehabilitation Team") for the management of Fidelity Bankers affairs and its rehabilitation. What follows is a Summary of the Rehabilitation Plan (the "Summary") they have formulated for the protection of contract-holders and creditors of Fidelity Bankers. Details of the entire Rehabilitation Plan will be presented to the State Corporation Commission pursuant to the Notice set forth in the Second Report to Policyholders and Interested Parties. A glossary of defined terms is set forth in paragraph X of this summary.

The Rehabilitation Plan for Fidelity Bankers described in the following pages was developed given the financial circumstances in which the Company currently finds itself and has as its central element a proposed transaction with Hartford, a Connecticut corporation which is a subsidiary of ITT-Hartford Insurance Group. The Rehabilitation Plan and the proposed transaction with Hartford will be presented to the Commission and are subject to its confirmation and approval. What follows is only a Summary of the Rehabilitation Plan. After May 1, 1992, the full text of the Rehabilitation Plan will be available from the Deputy Receiver at a cost of $0.20 per page by calling (800) 366-4488.

I. HIGHLIGHTS OF THE REHABILITATION PLAN

The proposed Rehabilitation Plan provides that:

1. The policies and annuities of contract-holders who Opt In to the Rehabilitation Plan will be assumed and reinsured by Hartford with 100% of Account Values and insurance coverages being preserved. Those contracts assumed and reinsured by Hartford will be modified as more fully described in this Summary.
2. Contract-holders who elect to Opt Out of the Rehabilitation Plan will receive 85% of their Account Values shortly after an Effective Date established by the Rehabilitation Plan but their contracts will be cancelled and all life and other insurance benefits will be terminated. Opt Out contract-holders will also receive a Fidelity Bankers' annuity with account values of 15% of their current Account Values but such annuities will not permit cash surrenders or Policy Loans for at least two years. The actual timing and level of annuity payments are not yet known; therefore, a recovery of the 15% of account values is not guaranteed.
3. Contract-holders who have previously elected to surrender all or part of their contracts under OPTION 1 as described in the July 1991 REPORT TO POLICYHOLDERS AND INTERESTED PERSONS may choose to either Opt In to the Rehabilitation Plan or Opt Out of the Rehabilitation Plan. If they Opt In to the Rehabilitation Plan they will receive a Hartford annuity with account values equal to the funds currently held for them pursuant to their OPTION 1 election. If they Opt Out of the Rehabilitation Plan, they will be treated in the manner as described in paragraph 2, above.
4. A Fidelity Bankers Trust will be established and certain assets and liabilities will be transferred to it. In part, the Trust will be used to provide Enhancement to contract-holders opting into the Rehabilitation Plan if assets transferred to the Trust perform well in the marketplace. After funds have been disbursed from the Trust to satisfy the retained claims and liabilities, the residual amounts left in the Trust will be disbursed to Fidelity Bankers.
5. The transaction with Hartford will require that it assume 100% of the liabilities for the Fidelity Bankers Restructured Contracts transferred to it in exchange for a lower amount of Fidelity Bankers' assets. Fidelity Bankers' assets not transferred to Hartford will be retained by Fidelity Bankers for the discharge of other liabilities and operation of the Rehabilitation Plan.
6. A claims filing period will be established which requires that all creditors and contract-holders must timely present their claims to the Deputy Receiver. The claims filing period shall not apply to creditors who have previously filed or had their claims decided under the Receivership Appeal Procedure, nor shall it apply to contract-holders whose policies and contracts are covered by the Rehabilitation Plan. The claims filing period should not be construed as reopening or resurrecting previously decided issues, claims or appeals.

II. GOALS OF THE REHABILITATION PLAN

To the maximum extent possible under the circumstances, the Rehabilitation Plan is intended to fulfill the following important goals:

III. DESCRIPTION OF REHABILITATION PLAN

The Rehabilitation Plan principally consists of two stages, the assumption and reinsurance transaction with Hartford and the wind-down phase.

During the first phase, an Election Notice will be sent to all Fidelity Bankers' contract-holders informing them of their ability to participate in or be excluded from the Rehabilitation Plan. The policies or contracts of contract-holders electing to participate in the Rehabilitation Plan will be restructured in the manner more fully described below and will then be assumed and reinsured by Hartford. Those contract-holders will then be deemed to have become Hartford contract-holders. While the changes imposed on the contracts in the restructuring process are more fully described below, it is worth noting that credited interest rates and surrender charges, as well as Policy Loan and new premium provisions will be modified. The Account Value of each restructured contract would be the same as the Account Value of its predecessor Fidelity Bankers' contract. Contract-holders who do not expressly elect to Opt Out of the Rehabilitation Plan will be deemed to have opted in and agree to participate in the Rehabilitation Plan.

A. Restructuring Modifications

Modifications to Fidelity Bankers Contracts in anticipation of their assumption and reinsurance by Hartford can be summarized as follows:

1. Annuitized contracts and Term Life insurance policies will not be modified. Accident and Health policies may be modified. Whole Life insurance policies, other than those described below, will not be modified.
2. For all Annuity and Single Premium Whole Life contracts:

1. Contract-holders will be given the opportunity to elect either a five-year or ten-year interest Guarantee Period. The interest crediting rates will be competitive with those offered by other established insurers marketing similar products and guarantee periods. If market conditions as of the date of this Summary exist on the Effective Date established by the Rehabilitation Plan, interest crediting rates would be in the range of 6.00% to 7.00% for annuity contracts and 5.00% to 6.00% for SPWL contracts, depending upon the Guarantee Period chosen by the contract-holder. The restructured policies will contain a decreasing surrender charge schedule. That schedule will be adjusted to reflect the Fair Market Value of assets transferred to Hartford by the Deputy Receiver on the Effective Date. Depending upon how well Fidelity Bankers assets perform between now and the Effective Date, the Deputy Receiver may be able to transfer sufficient assets to Hartford which requires Hartford to establish a policy surrender charge schedule of 7% in year one grading down to 1% over a seven-year period. In no event, however, shall the surrender charge schedule imposed by Hartford exceed 11% in year one grading down to 1% over a ten-year period. Actual interest crediting rates will be adjusted on the Effective Date depending on financial market conditions existing on that date.
2. A "Market Value Adjustment" (MVA) will apply to contract loans and to partial or full contract surrenders before expiration of the interest rate Guarantee Period after the Effective Date of the Rehabilitation Plan. This adjustment will reflect the impact that interest rate fluctuations have on the market value of the underlying assets assumed by Hartford. Generally, as interest rates fall, adjustment will result in a higher cash payment upon loan or surrender. Conversely, the MVA will result in a lower cash payment in a rising interest rate environment. No MVA will apply after the end of the chosen Guarantee Period, unless a Guarantee Period is renewed or extended by the contract-holder.
3. Single premium whole life contract-holders will be allowed immediate access to their Account Values by way of Policy Loans, subject to the particular contract's loan provisions and an MVA. Interest earned on annuity contracts after the Effective Date of the Rehabilitation Plan from Hartford may be withdrawn as often as monthly without a surrender charge or an MVA. Interest withdrawals which exceed the interest credited during any 12 month period are, however, subject to both a surrender charge and an MVA. All other "bailout" and other provisions permitting surrender-charge-free withdrawals will be eliminated. Contact-holders may annuitize their contracts at any time without a surrender charge according to the terms of the restructured contract. If, however, a contract is annuitized during the interest rate Guarantee Period, the Account Value will be adjusted by an MVA.
4. Contract-holders may surrender their contracts at any time following the Effective Date of the Rehabilitation Plan subject to the provisions of their restructured contracts.

            3. For all Universal Life and Interest Sensitive Whole Life contracts:

1. Contract-holders will be allowed immediate access to their Account Values by way of Policy Loans, subject to the particular contract's loan provisions.
2. Hartford will not assess a front-end charge to the Account Value of an assumed contract. However, new premiums will be subject to a normal 6% front-end charge.
3. Current interest rates and cost-of-insurance charges may be adjusted. Monthly administrative fees of $4.00 per policy will be imposed.
4. Surrender charges will be adjusted based upon each insured's age and the amount of insurance coverage in effect. If the contract is surrendered during the first two years following the Effective Date established by the Rehabilitation Plan, an additional surrender charge equal to 2% of the Account Value will be applied.

OTHER CONTRACT PROVISIONS AND CHANGES WILL APPLY THAT CANNOT BE DESCRIBED IN THIS SUMMARY. FULL DETAIL WILL BE AVAILABLE TO CONTRACT-HOLDERS BY RECEIPT OF A COPY OF THE REHABILITATION PLAN OR FOLLOWING APPROVAL OF THE DEPUTY RECEIVER'S APPLICATION BY THE VIRGINIA STATE CORPORATION COMMISSION.

B. Benefits for Non-Participants

Contract-holders who elect not to permit Hartford to assume and reinsure their contracts ("Declining Contract-holders") may "Opt Out" of the Rehabilitation Plan. If they choose to do so, their Fidelity Bankers Contracts will be canceled, and they will receive a percentage of their Account Value, if any, in cash shortly after the Effective Date established by the Rehabilitation Plan. All death benefits and other policy provisions will be immediately lost by choosing this option. Currently, it is estimated that such cash payment will be at least 85% of accumulated Account Value (additional surrender charges will NOT be applied) as of the Effective Date of the Rehabilitation Plan. In addition, the Rehabilitation Plan is designed to provide Declining Contract-holders additional value up to the remaining 15% of Account Value, depending on the performance of those assets of Fidelity Bankers not transferred to Hartford as part of the assumption. It is anticipated that such additional value will be provided by making available to Declining Contract-holders single premium deferred annuities with account values equal to the remaining 15%. These annuities will not permit any cash surrenders, Policy Loans or other cash value payments for a period of time yet to be determined but likely to be at least 24 months. A declining surrender charge schedule will apply thereafter. Depending on financial circumstances, withdrawal of interest accrued on such annuities may be permitted. Because the value of this benefit depends strictly on the performance of the Retained Assets, recovery of the 15% is not guaranteed.

C. Benefits for OPTION 1 Holders

Current or former contract-holders who have "OPTION 1" account values being held under the moratorium may elect either:

1. a new annuity from Hartford funded with 100% of their existing "OPTION 1" account values; or
2. an immediate cash out of 85% of their "OPTION 1" account value with the prospect of recovering up to the additional 15% depending upon the performance of those assets of Fidelity Bankers not transferred to Hartford as a part of the assumption. The actual timing and level of additional payments are not yet known and could take a non-cash form, such as an annuity; therefore, recovery of the 15% is not guaranteed.

D. Transfer of Assets to Hartford

In consideration of the assumption and reinsurance of Fidelity Bankers' contracts, Hartford will receive from Fidelity Bankers assets with a Fair Market Value equal to a percentage of the liabilities assumed by Hartford as part of the Rehabilitation Plan. At this time it is estimated that the assets transferred to Hartford would have Fair Market Value approximately equal to 94% of the Account Values of contracts assumed and reinsured by Hartford.

E. Value Contributed by Hartford

The value contributed to the Rehabilitation Plan by Hartford consists primarily of the difference between the Account Values it assumes and the market value of assets transferred to it under the relevant agreements. In addition, Hartford is providing other consideration to Fidelity Bankers as part of the Rehabilitation Plan. Nonetheless, a rough approximation of the value contributed can be ascertained by determining the expected Fair Market Value of Transferred Assets, calculating the percentage of Account Values assumed that that value represents, and multiplying the amount of Account Values assumed by an amount equal to one minus that percentage. Thus, for example, if the expected value of Transferred Assets is $3,760,000,000, and the expected amount of Transferred Liabilities is $4 billion, the value contributed is equal to (1 - .94) times $4 billion, i.e., .06 x $4,000,000,000 = $240,000,000.

 F. Fidelity Bankers Trust

As part of the Rehabilitation Plan there will be established a Fidelity Bankers Trust for management of certain assets and liabilities not transferred to Hartford. Certain of the Retained Assets will be transferred to the Trust for disposition of certain remaining liabilities of Fidelity Bankers, including those of general creditors and those for Enhancement for contract-holders who Opt In to the Rehabilitation Plan. The Trust will be established by order, and under supervision of, the Commission, and its affairs will be administered by the Deputy Receiver and the Rehabilitation Team.

G. Enhancement

The Rehabilitation Plan will establish a minimum Enhancement obligation to policyholders who Opt In to the Rehabilitation Plan of an amount to be determined. Additional amounts may be provided in addition to the minimum Enhancement obligation. Such Enhancements will be funded by the Trust as, and when, its assets permit. Accordingly, the payment of both the minimum Enhancement obligation and additional amounts will depend on the assets available and, therefore they can not be guaranteed. These Enhancements are provided as part of the Rehabilitation Plan to settle Fidelity Bankers' liabilities and provide compensation for the loss of liquidity and other costs resulting from the causes of the receivership proceeding.

Such Enhancements will be funded through payments to Hartford which would, in turn, credit those amounts to the Account Values of the policies and contracts assumed and reinsured pursuant to the Rehabilitation Plan. However, the Deputy Receiver reserves the right to fund the Enhancements by direct cash payments to relevant policyholders in lieu of payments to Hartford.

H. Implementation of the Rehabilitation Plan

After all contract-holders have elected to Opt In (participate) or Opt Out (be excluded from) the Rehabilitation Plan, the appropriate amount of assets will be transferred to Hartford and the Retained Assets will be used by the Deputy Receiver to fulfill other elements of the Rehabilitation Plan. Some of such assets will be retained at Fidelity Bankers and others will be transferred to the Trust.

The Trust will devote its assets first to the funding of Enhancements and to the disposition of other contract-holder claims and thereafter to the disposition of general creditor claims. In the event that assets remain in the Trust after all such claims have been paid, the Trust will be dissolved and those assets would be conveyed to Fidelity Bankers.

The Retained Assets will be used for the payment of costs of administering the Rehabilitation Plan, including administrative costs of the Trust and expenses of litigation. To the extent that Fidelity Bankers is liable for amounts which, under applicable law, must be paid before claims of contract-holders, those Priority Claims will be paid after providing for administrative expenses. In addition, to the extent that assets remain after payment of Priority Claims and contract-holders obligations, Retained Assets may be used for the discharge of any general creditor claims remaining at Fidelity Bankers and not transferred to the Trust.

After payment of Priority Claims, and once the claims of all contract-holders and general creditors have been satisfied by the Trust, the residual amount in the Trust, if any, will be transferred to Fidelity Bankers.

 I. Future of Fidelity Bankers

If the circumstances permit, the Rehabilitation Plan contemplates that after the transfer of all liabilities as outlined above, Fidelity Bankers would be mutualized and would be owned by its contract-holders. Under this proposal, the equity value of Fidelity Bankers would be established at the Confirmation Hearing based upon the financial information set forth in the application to approve the Rehabilitation Plan. Upon a finding by the Commission that the mutualization proposal would serve the best interest of contract-holders and other creditors, and after determining such equity value, the Deputy Receiver will request that the Commission order that all shares of stock in Fidelity Bankers be retired and cancelled in accordance with the terms of mutualization as found by the Commission. The stockholder of Fidelity Bankers (Fidelity Bankers Insurance Group, Inc.) may receive a payment for the acquisition or cancellation of its shares, based on the value, if any, as established by the Commission. However, such payment can be approved only if Fidelity Bankers had any equity value based upon the financial information provided under the Rehabilitation Plan, and provided that such payment would not cause Fidelity Bankers surplus to contract-holders to be less than the amount required for domestic mutual insurers under Virginia law. In the alternative, and if mutualization is not possible, and further depending on the circumstances, equity holders may be given the opportunity to regain management responsibility for Fidelity Bankers and resume its operations as an insurer, subject to the conditions of the Rehabilitation Plan and applicable insurance laws and regulations.

The current operating facility of Fidelity Bankers, including its personnel, are expected to remain substantially in their current configuration for a period of at least twelve months following the Effective Date of the Rehabilitation Plan. Thereafter, the operations of Fidelity Bankers will be substantially reduced and the administration of the contracts assumed and reinsured by Hartford will be managed at Hartford facilities.

 IV. FINANCIAL CONDITION

As required by law, Fidelity Bankers reports its financial condition to state insurance Regulators in accordance with statutory accounting principles. As of December 31, 1990 (prior to the Receivership), these reports reflected total assets of $4,069,080,658, liabilities of $3,947,162,167 and capital and surplus of $121,918,491.

The rehabilitation team has determined that the financial reports filed by the Company prior to receivership, and the financial report filed for the period ending June 30, 1991 (shortly after the commencement of receivership proceedings) reflected reporting methodologies which, in the opinion of the rehabilitators, did not most fairly depict the true economic condition of the Company. Thus, while the statutory report for June 30 showed an approximate capital and surplus of $95 million, the rehabilitators have subsequently concluded that the Company's assets had been overstated and its liabilities understated. As noted below, it has since been determined that the Company was economically insolvent by at least $150 million.

Receivership proceedings were commenced for Fidelity Bankers on May 13, 1991, when massive annuity surrender and Policy Loan requests threatened the financial viability of the Company. The perceived inability of the Company to cope with this "run on the bank" (which may have been prompted in part by adverse publicity regarding other large annuity insurers) served to emphasize the weakness of Fidelity Bankers' capital structure. Put simply, the Company did not have enough capital and surplus to withstand the substantial capital losses that it would inevitably have to sustain in order to liquidate its assets to cope with its sudden and massive needs for cash. As of the Receivership Date, Fidelity Bankers was unable to pay its obligations as they became due in the usual course of business and, as a result, it was necessary for the Deputy Receiver to impose a moratorium on the payment of Policy Loans, cash or surrender values, surrenders, fund transfers, lapses, cash-outs and similar payments, and other contract changes at Fidelity Bankers.

At the time receivership proceedings were instituted, no finding had been made that the Company was insolvent. However, since that date, analysts on the Rehabilitation Team have worked diligently to ascertain what its true financial condition was on May 13, 1991. It has now been determined that, on an economic basis, the Company was insolvent by at least $150 million. That is to say, they estimate that on the Receivership Date the Company's liabilities exceeded the fair market value of its assets by at least $150 million.

The Rehabilitation Team instituted a number of measures (further discussed in the Rehabilitation Plan) to remedy the Company's poor operating results and apparent insolvency. By December 31, 1991, a number of changes had taken place. The financial report (Annual Statement as of December 1991) filed with state Regulators for that period was restructured so that, in the opinion of the rehabilitators, it fairly depicted the Company's assets and liabilities. On the other hand, it also reflected the results of the rehabilitation measures. On December 31, 1991, the statutory report reflected that liabilities exceeded assets by just under $82 million. This $82 million deficit was a substantial improvement from the condition in which the Company was found on May 13, 1991.

Part of the Fidelity Bankers' financial problems were attributable to its holding of large amounts of high-yield, non-investment-grade securities ("junk bonds"). These securities, which nominally produced a rate of return higher than would have been available from the high-grade securities in which most established insurers invest, were purchased in order to enable the Company to offer its contract-holders interest that exceeded those available from the Company's competitors. The effect was to permit Fidelity Bankers to grow at an accelerated pace because its products appeared very attractive in the marketplace. But, as "there is no free lunch", the price the Company paid for this strategy was that it was far too exposed to the "credit risk" of the issuers of those securities. That is to say, the securities in its portfolio experienced a greater rate of default (and therefore were greatly reduced in value or became worthless) than could have been expected from high-grade securities. In addition, and in recognition of this fundamental problem, the amount of high-yield securities in the Company's portfolio greatly exceeded that which is now recognized to be a prudent maximum by Regulators and industry experts.

To cope with this dilemma, the rehabilitators engaged in a program for the sale of non-investment-grade assets and replaced them with high-grade assets. This program has been phenomenally successful in reducing the percentage of Fidelity Bankers' admitted assets consisting of junk bonds from over 37% on May 13, 1991, to under 7% today. This is approximately one-third of the amount currently viewed as the maximum safe level. But, the enhancement of the quality of the Company's assets did not come without a price. As the Company disposed of the high-yield securities, it was required to face capital losses consisting of the difference between the value it previously reported on its financial statements for those assets and the amount it was able to realize in the marketplace when it disposed of them. Moreover, and as was expected, the investment income produced by the high-grade assets was substantially lower than that which the high-yield assets might have generated had they been performing as hoped at the time of purchase. To compensate for this reduction in investment income, the Rehabilitation Team reduced the interest rate credited on the Company's policies and contracts. Nonetheless, even the reduced crediting rates were competitive with those applicable to competing policies and contracts issued by other established insurers in the marketplace.

Simultaneously, the rehabilitation team engaged in a course of action designed to reduce the Company's liabilities and enhance the value of its assets.

While the condition of the Company at the time the Rehabilitation Plan is implemented may still reflect a deficit, the amount of that deficit is expected to be greatly reduced from that which existed on May 13, 1991. More importantly, the quality of the Company's assets will be far better than its investment portfolio on the Receivership Date. This is a critical factor in the rehabilitators' ability to persuade Hartford to enter into the agreement for the assumption and reinsurance of the Company's policies, that agreement being the key element of the Rehabilitation Plan.

The precise condition of Fidelity Bankers on the Effective Date of the Rehabilitation Plan cannot be predicted because the value of its assets at that time will depend on fluctuations in the financial markets. Nonetheless, the Company has substantially insulated itself from credit risk (that is, the danger that its assets will become worthless as a result of financial problems for their issuers) although it remains exposed to interest risk (that is the possibility that the market value of its assets will be reduced because those assets credit a lower interest rate than assets of equal duration then available in the marketplace). But, fundamentally, the Company's assets have been "stabilized" and are now far more marketable.

V. HISTORY OF THE REHABILITATION PLAN

Even before steps were taken to place Fidelity Bankers in receivership for conservation and rehabilitation, it was apparent to the Commission and its Bureau that the Company should be readily susceptible of successful rehabilitation insofar as protection of contract-holders interests were concerned. In part this is so because regulatory action was taken before the Company's problems became hopelessly irreparable. In addition, the Bureau resolved to move swiftly toward the implementation of rehabilitation measures. While there has been little publicity about the steps taken since that date, their results (as outlined above) speak for themselves.

Immediately upon the entry of the Receivership Order, Commissioner Foster constituted the Rehabilitation Team that included investment bankers (whose jobs it would be to seek and qualify potential buyers), asset managers (whose job it would be to manage the Company's securities in a manner consistent with rehabilitation goals), accountants (whose jobs it would be to determine and fairly report the Company's condition and to participate in the formulation of a Rehabilitation Plan for its rehabilitation), actuaries (whose jobs it would be to evaluate potential purchase offers and rehabilitation plans and to assist in the structuring of the ultimate Rehabilitation Plan), lawyers (whose jobs it would be to oversee the Company's operations, the search and qualification of potential buyers, the evaluation of potential purchase offers, and the design and implementation of the Rehabilitation Plan as well as providing normal legal services), and other consultants to fulfill a myriad of essential functions in the restoration of the Company to a point at which contract-holder interests could be effectively protected.

Without delay, the Rehabilitation Team solicited and evaluated potential purchase offers. While complex and time-consuming, this process was conducted entirely in private in order to protect the desired anonymity of the numerous parties which expressed an interest in the Company. It was the consensus of the Rehabilitation Team that this anonymity and privacy were essential elements in maximizing the value generated by the various offers. After extensive bidding, communicating and negotiating, the offer made by Hartford was identified as that which offered the most value and protection to the Company's contract-holders and creditors. Steps were then taken to arrive at a tentative agreement with Hartford for the implementation of a Rehabilitation Plan. Contemporaneously, other elements of the Rehabilitation Plan were developed by the Rehabilitation Team so that all could be presented to the Commission for confirmation at a public hearing.

During the process described above, the Rehabilitation Team received expressions of interest in purchasing the Company (or participating in its Rehabilitation Plan) from no less than a dozen potentially-qualified parties. Many of these offers differed substantially from one another, making their comparison a challenging task. After successive rounds of communication and negotiation, the list of qualified interested buyers was reduced to fewer than a half dozen and eventually the list was reduced to the one with which a tentative agreement has been made. Along the way, due consideration was given to the manner in which each offer coped with liabilities to contract-holders, generated value for other creditors and provided assurance of long-term viability.

Today, the Rehabilitation Team is confident that the Hartford offer is the best available. Nonetheless, and in the interest of assuring that "no stone is left unturned", the process by which the Rehabilitation Plan will be confirmed is structured so as to permit other interested parties to present competing offers they believe to be better than that made by Hartford.

 VI. EXPLANATION OF LEGAL PROCEDURE

A tentative agreement has been reached with Hartford for the implementation of a Rehabilitation Plan the centerpiece of which is Hartford's assumption and reinsurance of the policies and contracts of Fidelity Bankers contract-holders electing to participate in the Rehabilitation Plan. A summary of the Rehabilitation Plan is being provided to all interested parties in this communication. A hearing has been scheduled for June 1, 1992, at which the Deputy Receiver will present the proposed Rehabilitation Plan to the Commission for approval. Official notice of that hearing is included with the Second Report to Policyholders and Interested Persons.

Any interested Person may appear at that hearing to express opposition or challenges to the proposed Rehabilitation Plan, to offer competing plans, or to otherwise make his or her position known to the Commission. However, under the rules which govern proceedings before the Commission, all parties protesting the Rehabilitation Plan and other related matters are required to timely file a Notice of Protest and a Protest, together with the proper number of copies of all proposed testimony and exhibits necessary to establish their position on or before 10:00 a.m. on Friday, May 15, 1992, and Wednesday, May 20, 1992, respectively. In every case, these filings must be made with the State Corporation Commission, Document Control Center, 1200 Bank Street, Richmond, Virginia 23209 and complete copies must also be served upon Patrick H. Cantilo, Special Deputy Receiver, Fidelity Bankers Life Insurance Company, 1011 Boulder Springs Drive, Richmond, Virginia 23225.

The Deputy Receiver is requesting that the Commission enter an order following the Confirmation Hearing determining that Fidelity Bankers was insolvent as of May 13, 1991, fixing the rights of creditors as of that date, applying the relative priority of claims against the Company's assets in accordance with Section 38.2-1509 of the Virginia Insurance Code, establishing a claim filing period and providing any other relief the Commission deems appropriate. A copy of the application seeking such relief is included with the Second Report to Policyholders and Interested Persons.

It is anticipated that the Commission will enter an order approving the Deputy Receiver's proposed Rehabilitation Plan, or rehabilitation plan which the Commission finds would best serve the interests of contract-holders and creditors, shortly after the conclusion of the Confirmation Hearing. Thereafter, steps will be taken to implement the plan selected.

Because the Rehabilitation Plan will require that notice be provided to contract-holders and that they make elections following such notice, and because other complicated steps must be taken to put the Rehabilitation Plan into operation, it is anticipated that the Effective Date established by the Rehabilitation Plan will occur no earlier than 2-3 months following the entry of the order approving the Rehabilitation Plan by the Commission.

If the Deputy Receiver's proposed Rehabilitation Plan is approved by the Commission, on the Effective Date Hartford will assume and reinsure the Fidelity Bankers policies and contracts of contract-holders who have by then not elected to be excluded from the Rehabilitation Plan after such contracts have been restructured in the manner described above.

Payments to Declining Contract-holders will be made some time after implementation of the Rehabilitation Plan, currently estimated not to be any later than ninety days after the Effective Date. Such payments are now expected to be in the amount of 85% of Account Values. Additional payments, either for Enhancements or under the annuities issued to Declining Contract-holders, will be made some time thereafter, depending on performance of the Company's Retained Assets (whether held by Fidelity Bankers or the Trust).

The Rehabilitation Team will continue litigation for the recovery of assets that would in turn be devoted to discharging Rehabilitation Plan liabilities, including Enhancements, annuities issued to Declining Contract-holders, and other creditors' claims.

Conclusion of all steps necessary to implement the Rehabilitation Plan may take over two years, although contract-holders who participate in the Rehabilitation Plan will have 100% of their Account Values guaranteed by Hartford on the Effective Date and Declining Contract-holders will receive 85% of their Account Value shortly thereafter. Thus, for the purposes most critical to contract-holders, the Rehabilitation Plan will be largely implemented by the end of 1992.

VII. DISPOSITION OF RETAINED ASSETS

It is anticipated that the Retained Assets will include high-yield securities, other securities not acceptable to Hartford or not required for implementation of the Rehabilitation Plan and unpaid claims, including litigation, asserted by the Deputy Receiver against other parties and entities.

These Retained Assets will be liquidated and distributed among contract-holders and creditors to the extent of their approved claims which are not otherwise satisfied in the Rehabilitation Plan. Such distributions will be subject to the priority scheme expected to be adopted by the Commission which, in essence, calls for payment to contract-holders before satisfaction of general creditor claims. It is anticipated that such distributions can commence no earlier than 2-3 months after the Effective Date. Depending on the volume of assets, and their liquidity, it is possible that only one distribution will be made and that distribution would occur as late as 2-3 years after the Effective Date. On the other hand, if the assets perform well and become sufficiently liquid, a partial distribution may be made within months following the Effective Date, with additional distributions thereafter as additional assets are liquidated.

 VIII. TAX IMPLICATIONS

The proposed Rehabilitation Plan may have substantial tax implications for the Company and its contract-holders.

The contemplated transaction with Hartford, under which assets and liabilities will be conveyed to that company, including Enhancements, has been structured in a manner that is believed to minimize any potential adverse tax consequences to Fidelity Bankers. However, the Rehabilitation Plan includes some flexibility in order to cope with potential adverse tax consequences either for Fidelity Bankers or for Hartford. In any event, it is anticipated that the level of benefits expected to be provided to contract-holders will not be substantially affected by these tax implications for the Company.

The Rehabilitation Plan may present substantial tax issues for contract-holders. Life insurance and annuity contracts provide a number of income tax benefits to contract-holders which can be lost or limited if the contract is changed materially, or exchanged, and the change or exchange does not satisfy certain conditions. This may result from changes made in restructuring contracts and/or their assumption and reinsurance by Hartford. In addition, amounts received prematurely by contract-holders, which can include distributions of rights received upon a tax free exchange of contracts, may be subject to adverse tax treatment. This may result from the receipt of contract Enhancements. Contract-holders who Opt Out may be subject to immediate taxation for the gain realized as measured by the excess of the cash plus the value of any annuity contract received over the tax basis in the contract surrendered. Additionally, tax penalties may be imposed for premature distributions under all such contracts. The Internal Revenue Service ("IRS") has provided limited guidance as to how a rehabilitation plan will impact on contract-holders. In any event, the Rehabilitator has not decided on whether to seek rulings from the IRS before implementing the Rehabilitation Plan.

CHANGES MAY BE MADE TO THE REHABILITATION PLAN TO SATISFY THE RECEIVER THAT THERE ARE NO MATERIAL TAX CONSEQUENCES TO FIDELITY BANKERS OR THE CONTRACT-HOLDERS ARISING FROM THE IMPLEMENTATION OF THE REHABILITATION PLAN.

While every effort is being made to structure the Rehabilitation Plan in a manner that will not result in adverse tax consequences for contract-holders, EACH CONTRACT-HOLDER IS STRONGLY ADVISED TO FULLY CONSULT WITH HIS OR HER TAX ADVISORS REGARDING THE POTENTIAL IMPLICATIONS OF THE REHABILITATION PLAN. If contract-holders or their tax advisors have detailed questions regarding elements of the Rehabilitation Plan, those questions should be directed in writing to the Deputy Receiver at Fidelity Bankers Life Insurance Company in Receivership for Conservation and Rehabilitation, 1011 Boulder Springs Drive, Richmond, Virginia 23225.

NO REPRESENTATION OR WARRANTY IS MADE BY THE DEPUTY RECEIVER OR HARTFORD REGARDING ANY FAVORABLE OR ADVERSE TAX CONSEQUENCES RESULTING FROM THE PROPOSED REHABILITATION PLAN.

IX. OTHER CLAIMS AGAINST FIDELITY BANKERS

The agreement with Hartford does not require it to assume liability for amounts currently owed by Fidelity Bankers to general creditors and for amounts owed to contract-holders other than to the extent of the restructured contracts. The Rehabilitation Plan makes provision for disposition of Retained Liabilities through discharge both by Fidelity Bankers and the Trust. These amounts will be paid, subject to and under the provisions of the Rehabilitation Plan and the orders of the Commission, from the Retained Assets.

In order to fully ascertain the amount of the Retained Liabilities, a "Claim Filing Procedure" has been included in the Rehabilitation Plan in the following manner: Each Person claiming a right to payment by Fidelity Bankers shall be required to file a "Proof of Claim" ("POC") with the Deputy Receiver by use of a form to be promulgated and distributed following the Commission's approval of the Rehabilitation Plan. Under the Rehabilitation Plan, such POC's must be sworn, supported by adequate documentation, and filed no later than a "Bar Date" to be established by the Commission at the Confirmation Hearing.

Notice of all of the foregoing, together with POC forms, will be sent to all contract-holders, creditors and interested parties after the Commission enters an order to that effect.

Claims not presented in accordance with the foregoing procedure will be deemed barred or insufficient and will be rejected on those grounds. In like manner, claims filed after the deadline established by the Commission will be barred as a matter of law.

 X. GLOSSARY

Account Value With respect to a Fidelity Bankers Contract, or a Fidelity Bankers Restructured Contract, the "account value" or "accumulation value" or "contract value" as any one of such terms is defined in such Fidelity Bankers Contract or Fidelity Bankers Restructured Contract.

Assumed Contracts Those Fidelity Bankers Restructured Contracts which shall be assumed and reinsured by Hartford as of the Effective Date pursuant to the Assumption and Reinsurance Agreement.

Assumption and Reinsurance Agreement That certain assumption and reinsurance agreement by and among the Deputy Receiver, Fidelity Bankers and Hartford which shall provide for the assumption and reinsurance of Fidelity Bankers Restructured Contracts with respect to those Contract-holders who are not Declining Contract-holders.

Bureau The Bureau of Insurance, State Corporation Commission of the Commonwealth of Virginia.

Code The Internal Revenue Code of 1986, as amended, 26 U.S.C.

Commission The State Corporation Commission of the Commonwealth of Virginia.

Commissioner Steven T. Foster, Commissioner of Insurance of the Commonwealth of Virginia, or his successors.

Company Fidelity Bankers Life Insurance Company, In Receivership for Conservation and Rehabilitation.

Confirmation Date The date when the Commission enters an Order of Rehabilitation for Fidelity Bankers.

Confirmation Hearing That hearing before the Commission at which will be presented the Rehabilitation Plan and the transactions contemplated herein for approval by the Commission, all as more fully described herein.

Contract-holder The holder of any given Fidelity Bankers contract of insurance or annunity.

Declining Contract-holder A Contract-holder who has made or is deemed to have made an election to Opt Out pursuant to the Election Notice and to reject the assumption offered by Hartford.

Definitive Agreements The Assumption and Reinsurance Agreement, the Administrative Services Agreement, the Escrow Agreement and such other agreements as to which the Deputy Receiver and Hartford shall mutually agree and which are necessary and appropriate to effect the conveyance of the Transferred Assets to Hartford, the assumption and reinsurance of the Fidelity Bankers Restructured Contracts by Hartford and the provision of services by Fidelity Bankers to Hartford.

Deputy Receiver The Commissioner acting solely in his capacity as Deputy Receiver for Fidelity Bankers.

Effective Date A date no earlier than July 1, 1992, as mutually agreed upon by the Deputy Receiver and Hartford, on which the Transferred Assets are delivered to Hartford, and, as of which, the Fair Market Value of the Transferred Assets are determined and the amounts of the Transferred Liabilities are determined. The date when these events occur shall be considered the implementation date of the Rehabilitation Plan.

Election Notice That certain notice of election, in a form to be agreed upon by the Deputy Receiver and Hartford, which election notice shall be provided to the contract-holders of Fidelity Bankers Eligible Contracts that may be assumed and reinsured by Hartford in accordance with the Assumption and Reinsurance Agreement.

Enhancement Those recoveries received from the Fidelity Bankers Trust or Fidelity Bankers that are or will be paid or credited to Contract-holders who Opt In to the Rehabilitation Plan, as well as any supplemental policies or contracts of insurance provided to Contract-holders pursuant to an Enhancement agreement.

Fair Market Value The value of Fidelity Bankers' assets as shall be determined or agreed upon between Hartford and Fidelity Bankers pursuant to the Definitive Agreements.

Fidelity Bankers Fidelity Bankers Life Insurance Company, In Receivership for Conservation and Rehabilitation.

Fidelity Bankers Contracts Those certain Fidelity Bankers' insurance policies and contracts more fully identified in the Definitive Agreements.

Fidelity Bankers Restructured Contracts Those Fidelity Bankers Contracts which are restructured in the manner and to the extent set forth above and in the Definitive Agreements.

Fidelity Bankers Trust or Trust The trust or trusts created by or on behalf of Fidelity Bankers as described in this Summary.

Guarantee Period A five (5) year or a ten (10) year period provided for Annuity Contracts and Single Premium Whole Life Contracts as further described in the Definitive Agreements during which interest rates will be guaranteed.

Hartford Hartford Life Insurance Company, a Connecticut corporation.

Insurance Code The Virginia Insurance and Related Laws, as amended, including, but not limited to, Title 38.2, Code of Virginia and all regulations adopted thereunder.

OPTION 1 Funds Those funds held by Fidelity Bankers on account of OPTION 1 Holders.

 OPTION 1 Holder(s) Those certain Fidelity Bankers' Contract-holders who have previously elected to surrender all or part of their Fidelity Bankers Contracts and to keep such surrender in place pursuant to OPTION No. 1 as defined in pages 7 and 8 of the REPORT TO POLICYHOLDERS AND INTERESTED PERSONS of July 8, 1991.

Opt In The right granted by the Rehabilitation Plan and set forth in the Election Notice to Fidelity Bankers Contract-holders and OPTION 1 Holders to elect to accept a Fidelity Bankers Restructured Contract or Hartford annuity, which Contract shall be assumed and reinsured and become a Hartford assumed contract pursuant to the Assumption And Reinsurance Agreement in exchange for their Fidelity Bankers Contracts or OPTION 1 funds on deposit with Fidelity Bankers.

Opt Out The right granted by the Rehabilitation Plan and set forth in the Election Notice to Contract-holders to elect to reject the restructuring of their Fidelity Bankers Contract and the assumption by Hartford of their Fidelity Bankers Contracts or the issuance of a Hartford annuity.

Person Any natural person, corporation, partnership, association or other legal entity.

Policy Loan(s) With respect to a Fidelity Bankers Contract or a Fidelity Bankers Restructured Contract, "policy loans" as such term is defined in such Fidelity Bankers Contract or a Fidelity Bankers Restructured Contract.

Priority Claims Claims which must be paid before contract-holder and creditor claims.

Receivership Date May 13, 1991.

Receivership Appeal Procedure The appeal procedure adopted by the Commission for the disposition and adjudication of disputed claims filed against Fidelity Bankers.

Regulator Any state or federal regulatory authority having, or purporting to exercise, regulatory authority over the Rehabilitation Plan or the underlying contracts.

Rehabilitation Plan That certain plan of rehabilitation for Fidelity Bankers described herein and in any motions and supporting documents filed by the Deputy Receiver with the Commission.

Retained Assets Those assets retained by Fidelity Bankers or the Fidelity Bankers Trust.

Retained Liabilities Those Liabilities not assumed by Hartford under the Rehabilitation Plan.

Transferred Assets Those assets which are, on the Effective Date, transferred to Hartford in consideration of its undertakings pursuant to the Definitive Agreements.

 Transferred Liabilities Those liabilities of Fidelity Bankers to the holders of the Fidelity Bankers Restructured Contracts that have been assumed and reinsured by Hartford pursuant to the Assumption And Reinsurance Agreement and those Hartford annuities issued in exchange for OPTION 1 funds. The Transferred Liabilities shall expressly exclude (i) all Fidelity Bankers Contracts which are not in force as of the Effective Date for any reason, including, without limitation, Contracts which are not in force due to the death of the Contract-holder prior to the Effective Date, and (ii) all Fidelity Bankers Contracts of Contract-holders who have elected to Opt Out.

COMMONWEALTH OF VIRGINIA
STATE CORPORATION COMMISSION

NOW COMES, Steven T. Foster, Deputy Receiver of Fidelity Bankers Life Insurance Company, and makes this Application for Orders Setting Confirmation Hearing, Approving Form of Notice, Approving Plan of Rehabilitation and Related Matters (the "Application") seeking the State Corporation Commission's approval, ratification, and adoption of the Deputy Receiver's Plan of Rehabilitation and related matters, and in support thereof would show the Commission as follows:

1. On May 13, 1991, the Circuit Court for the City of Richmond entered an Order Appointing Receiver, and appointed the State Corporation Commission (the "Commission") as Receiver of Fidelity Bankers Life Insurance Company ("Fidelity Bankers" or "the Company");

2. On May 13, 1991, the Commission entered its Order Appointing Deputy Receiver for Conservation and Rehabilitation (the "Receivership Order") and appointed Steven T. Foster, Commissioner of Insurance, State Corporation Commission, Bureau of Insurance, as Deputy Receiver to act on behalf of the Commission while it is the Receiver for Fidelity Bankers;

3. On May 13, 1991, Patrick H. Cantilo was appointed Special Deputy Receiver to assist the Deputy Receiver in conserving the business and conducting the affairs of Fidelity Bankers and to begin the task of preparing for its rehabilitation. The Deputy Receiver and Special Deputy Receiver (the "Deputy Receivers") have accordingly engaged in a process for the identifying, locating, and marshalling Fidelity Bankers' assets. At the same time, the Deputy Receivers have endeavored to identify and evaluate Fidelity Bankers' true liabilities, all in anticipation of this Application;

4. On September 19, 1991, the Commission issued its First Order in Aid of Receivership (the "First Order") which sets forth the appeal procedure (the "Receivership Appeal Procedure") which all dissatisfied creditors or other interested persons must follow to challenge the Deputy Receiver's determination of any matter in the receivership estate;

5. Under the provisions of Virginia Code Section 38.2-1518, the Deputy Receivers have actively attempted to identify a purchaser to become part of a plan to rehabilitate Fidelity Bankers. Various qualified, prospective purchasers, as determined by the Deputy Receivers, have been permitted access to the books, records and staff of Fidelity Bankers to conduct their due diligence investigation in an effort to determine a fair and reasonable value for Fidelity Bankers and their interest, and ability to participate in the Rehabilitation of the Company. In determining whether or not an interested party could be deemed a "qualified, prospective purchaser," the Deputy Receivers and their consultants considered, inter alia: whether such party had demonstrated the ability to devote adequate resources to the contemplated transaction; whether such party possessed sufficient expertise, experience, and capital to conclude the contemplated transaction; whether such party had demonstrated substantial willingness to undertake the necessary effort to successfully conclude the transaction; and whether the intent of such party, as manifested by its communications, would be consonant with the best interests of Fidelity Bankers' contract-holders and creditors. Contract-holders shall consist of all persons or entities who hold a Fidelity Bankers' policy or contract of insurance. Following their review, the Deputy Receivers have communicated with each qualified, prospective purchaser in an attempt to more fully ascertain the best possible rehabilitation plan that can be implemented for the Company consonant with the best interests of its contract-holders and creditors. Due to the sensitive nature of this information and in conformance with the due diligence and bid proposal procedures established by the Deputy Receivers, the identities of the prospective purchasers participating in the due diligence process but not selected to become part of the plan proposed by this Application have been kept strictly confidential in order to enhance participation. Such prospective purchasers conditioned their participation in this process upon preservation of the confidentiality of their identity. The Deputy Receivers would respectfully show the Commission that all such actions, referred to as the "Due Diligence and Bid Proposal Procedures", including maintaining the anonymity of the prospective purchasers, have been in the best interests of Fidelity Bankers' contract-holders and other creditors;

6. In accordance with the applicable provisions of the Virginia law, the Deputy Receivers believe it to be in the best interests of the contract-holders and other creditors of Fidelity Bankers that it be rehabilitated by the approval, ratification, and adoption of the Rehabilitation Plan for Fidelity Bankers Life Insurance Company (the "Rehabilitation Plan") presented to the Commission in this Application. After due consideration of Fidelity Bankers' books and records, review of all final bid proposals received from prospective purchasers, and significant consultation and negotiation with all appropriate parties (including certain retained consultants and advisors), the Deputy Receivers have prepared the Rehabilitation Plan which they believe to be in the best interests of all contract-holders and other creditors. A detailed Summary of the Rehabilitation Plan (the "Plan Summary") is attached hereto and incorporated by reference herein for all purposes as Exhibit "1". As a part of the Rehabilitation Plan, Hartford Life Insurance Company ("Hartford"), a Connecticut corporation, has agreed to assume and reinsure the Fidelity Bankers insurance and annuity contracts of contract-holders so electing. Terms of this assumption are contained within an Agreement of Intent to Acquire the Insurance Business of Fidelity Bankers (the "Hartford Contract");

7. The complete Rehabilitation Plan will be filed with the Commission by the Deputy Receiver on or before May 1, 1992. As part of the Rehabilitation Plan, the Deputy Receivers have respectfully recommended to the Commission a proposal that would mutualize Fidelity Bankers in accordance with Virginia Code Section 38.2-1518. Under this proposal, the equity value, if any, of Fidelity Bankers would be established at the Confirmation Hearing. Upon a finding by the Commission that the mutualization proposal would serve the best interests of contract-holders and other creditors, and after determining such equity value, the Deputy Receivers would respectfully request that the Commission order that all shares of stock in Fidelity Bankers be retired and canceled in accordance with the terms of this mutualization and as detailed in the Rehabilitation Plan. The mutualization of the Company would cause the existing contract-holders to own or control Fidelity Bankers, provided that provision has been made to the former shareholder for its equity interest, if any, in Fidelity Bankers;

8. In the course of the rehabilitation efforts at Fidelity Bankers, the Deputy Receivers confirmed that the Company was severely undercapitalized when the Receivership Order was entered on May 13, 1991. Furthermore, and as is reflected in the Plan Summary, Fidelity Bankers was insolvent on May 13, 1991. Indeed, even with a substantial improvement in the asset portfolio, Fidelity Bankers still reported a statutory deficit as regards contract-holders of just under $82 million on December 31, 1991;

9. Given the insolvency of Fidelity Bankers, the Deputy Receivers would respectfully represent to the Commission that it should enter its Order determining the liquidation value of rights held by Fidelity Bankers' contract-holders, such liquidation value to consist of a fraction, expressed as a percentage, the numerator of which shall be the fair market value of Fidelity Bankers' assets as of May 13, 1991, and the denominator of which shall be the sum of the liabilities owed on that date by Fidelity Bankers to all of its contract-holders;

10. The Deputy Receivers believe there is a substantial probability that the assets of Fidelity Bankers, together with the Hartford Contract, will be sufficient to pay in full any of the amounts owed to contract-holders which might be "covered claims" under the Virginia priority scheme as defined in Virginia Code Section 38.2-1603. As such, the Deputy Receivers believe, and respectfully represent to the Commission, that in all probability no assessments will be necessary which would "trigger" the obligation of the Virginia Life, Accident and Sickness Insurance Guaranty Association, or any other guaranty association. As such, the Deputy Receivers request that the Commission approve, ratify, and adopt the decisions of the Deputy Receivers to establish and maintain the use of the Fidelity Bankers Trust, described in subsequent paragraphs, as a means by which to satisfy the claims of contract-holders and other creditors.

11. Given Fidelity Bankers' insolvency, and pursuant to applicable provisions of the Virginia law, the rights of all contract-holders, other creditors, shareholders, other interested parties, and contingent claimants should be deemed fixed as of May 13, 1991, unless otherwise ordered by the Commission;

12. In the interest of finalizing all claims and actions against Fidelity Bankers, the Deputy Receivers request that the Commission enter an Order establishing a claims bar date ("Bar Date") to occur ninety days after the approval of this Application. The Bar Date shall be the date by which all claims, and proofs thereof, against the receivership estate of Fidelity Bankers must be presented to the Deputy Receivers. The Deputy Receivers further request that they be authorized to promulgate forms upon which such claims may be presented and to establish criteria for the presentation and adjudication of such claims including, but not limited to, that they be sworn and adequately documented. The Bar Date will serve to end the Claims Filing Period (which should run from the time the Commission approves this Application until the Bar Date) and determine all claims against the receivership estate. Contract-holders whose policies or contracts are provided for in the Rehabilitation Plan should not be required to file claims. All other claims of any kind or nature, including claims of contract-holders for benefits other than those contemplated by the Rehabilitation Plan described herein, should be deemed barred if not filed by the Bar Date. Those individuals or entities with claims currently pending before the Deputy Receiver or the Commission in accordance with the Receivership Appeal Procedure should similarly not be required to file a subsequent claim by the Bar Date. Notwithstanding the foregoing, the establishment of this Claims Filing Period should not be a means by which those individuals or entities who have previously waived their rights under the Receivership Appeal Procedure or have otherwise had their appeals adjudicated may seek review or re-adjudication of such claims. Review of previously adjudicated claims will remain subject to the terms of the Receivership Appeal Procedure. Thus, the Claims Filing Period which ends on the Bar Date should not reopen or resurrect previously decided issues, claims, or appeals;

13. The Deputy Receivers should be authorized to take the appropriate action to reject or deny any claims or disputes filed after the Bar Date. The Deputy Receivers request that any claims, whether resulting from judgments in other courts or jurisdictions, or otherwise, which are not filed on or before the Bar Date and not filed in compliance with the Commission's Orders, should be deemed forever barred and should not be permitted to share in any distributions of the assets of Fidelity Bankers through the Hartford Contract, the Fidelity Bankers Trust, or otherwise;

14. As a part of the Rehabilitation Plan and the Hartford Contract, certain terms of the various contracts issued by Fidelity Bankers must be restructured so as to preserve the value of the contracts and allow for the orderly transfer of the contracts to Hartford. Specifically, descriptions of the contracts' restructuring provisions are found in the schedules and exhibits attached to the Hartford Contract. The Deputy Receivers would respectfully show the Commission that such proposed restructuring of Fidelity Bankers' contracts to be assumed and reinsured by Hartford should be approved, ratified and adopted upon a finding that such restructuring is in the best interests of the contract-holders and other creditors of Fidelity Bankers;

15. All assets, liabilities, and claims not transferred to Hartford should be retained by Fidelity Bankers or, in accordance with the terms of the Rehabilitation Plan, conveyed to a Commission-supervised fund or trust (the "Fidelity Bankers Trust or Trust"), which fund or Trust should be established by this Commission. The Deputy Receiver requests that he be appointed trustee of the Fidelity Bankers Trust, and that the Trust operate under the protection of the Commission, under the direct control of the Deputy Receiver and as determined by the Commission under the terms of the Trust. The Deputy Receivers further request that the Trust be administered for the benefit of Fidelity Bankers' contract-holders and other creditors, and that the Trust be funded, and that funds be disbursed therefrom, in accordance with the terms of the Rehabilitation Plan and the priority scheme outlined herein. More specifically, the Trust's assets should be distributed, after reserving for the payment of costs and expenses of administration, in the following priority order: (a) priority wages as provided in Section 38.2-1514 of the Virginia Code; (b) non-voidable perfected secured claims to the extent of the value of their security; (c) taxes owed to the United States and any other debt owed to any other person, including the United States, who by the laws of the United States are entitled to priority; (d) policyholder claims apportioned without preference; and (e) other creditors. The Deputy Receivers request that after funds have been disbursed from the Fidelity Bankers' Trust to satisfy its claims and liabilities, the residual amounts left in the Trust should be disbursed to Fidelity Bankers. The Deputy Receivers further request that an order be entered limiting Hartford's and Fidelity Bankers' liability to those policies and claims of Fidelity Bankers which are identified and assumed under the terms of the Rehabilitation Plan, except that such claims and liabilities not assumed may be presented to the Fidelity Bankers Trust as provided herein;

16. The Deputy Receivers believe, and respectfully represent to the Commission, that the approval, ratification, and adoption of the Rehabilitation Plan will serve the best interests of contract-holders and other creditors, and they further believe that it presents fairly the shareholder-equity value in Fidelity Bankers' parent company, Fidelity Bankers Insurance Group, Inc. Accordingly, the Deputy Receivers now seek to undertake the appropriate steps to facilitate the approval of the Rehabilitation Plan. Specifically, the Deputy Receivers request that the Commission enter an Order Setting Confirmation Hearing which schedules a hearing for the presentation by the Deputy Receivers to the Commission of the proposed Rehabilitation Plan, at which time all parties seeking to oppose, object, or challenge, the Application or the Rehabilitation Plan, in whole or in part, may appear before the Commission and assert the same;

17. In order to be fully apprised of the issues raised by other interested parties, and so that proper responses thereto may be made, and given the complex nature of the issues involved in the Rehabilitation Plan, the Deputy Receivers request that the Commission enter an order requiring all persons opposing, objecting, or challenging the Application or Rehabilitation Plan to comply with such pre-filing procedures as the Commission deems appropriate;

18. The Deputy Receivers further request that the Commission approve, ratify, and adopt the text of the Notice of Order Setting Confirmation Hearing, Establishing Response Date, Approving Form of Notice, and Related Matters (the "Notice"), a copy of which is attached hereto as Exhibit "2" and incorporated by reference herein for all purposes. The Notice is intended to inform all parties interested in asserting claims, involving the proposed rehabilitation of Fidelity Bankers, the Confirmation Hearing, their right to appear, and the requirements involved in protesting the Rehabilitation Plan and related matters. The Deputy Receivers request authority to mail the Notice by first class mail or otherwise deliver to all contract-holders as of May 13, 1991, agents as of May 13, 1991, other creditors, and shareholders, and to publish it in one local newspaper and two national newspapers. Interested parties may obtain on or after May 1, 1992, upon written request to the Special Deputy Receiver, complete copies of the Rehabilitation Plan from Fidelity Bankers at a cost of twenty cents ($0.20) per page;

19. The Deputy Receivers request, after due consideration of the Rehabilitation Plan, which includes the Hartford Contract, that the Commission find that the proposed Rehabilitation Plan serves the best interests of, and is fair to, all contract-holders and other creditors, and upon a finding that it presents fairly the shareholder equity value in Fidelity Bankers of the parent company, Fidelity Bankers Insurance Group, Inc., such that the Commission will approve, ratify, and adopt the Rehabilitation Plan in its entirety.

WHEREFORE, premises considered, the Deputy Receivers pray for Orders providing as follows:

1. That the Commission enter an Order directing as follows:

a. That a Confirmation Hearing be scheduled to commence before the Commission for purposes of considering the Rehabilitation Plan, which includes the Hartford Contract, and related matters;

b. That the text of the Notice as presented be approved as reasonably appropriate notification to all interested parties; and

c. That the Deputy Receiver be authorized to send the Notice by first class mail or deliver to all current contract-holders, former agents, other creditors, shareholders, and interested parties, and to publish the Notice in one local and two national newspapers; and to inform interested parties that after May 1, 1992, upon written request to the Special Deputy Receiver, complete copies of the Rehabilitation Plan may be made available by Fidelity Bankers at a cost of twenty cents ($0.20) per page; and

2. That, after the Confirmation Hearing, the Commission enter an Order as follows:

a. Approving, ratifying, and adopting the Due Diligence and Bid Proposal Procedures, the Rehabilitation Plan, which includes the Hartford Contract and the restructuring of Fidelity Bankers' contracts and policies, upon a finding that the Rehabilitation Plan is in the best interests of, and fair to, the contract-holders and other creditors of Fidelity Bankers, and upon a finding that it presents fairly the shareholder equity value in Fidelity Bankers of the parent company, Fidelity Bankers Insurance Group, Inc.;

b. That Fidelity Bankers be declared insolvent as of May 13, 1991;

c. That upon a finding of insolvency of Fidelity Bankers, the Commission decree that all rights of contract-holders, other creditors, shareholders, other interested parties, and contingent claimants shall be fixed and certain as of May 13, 1991, and not subject to alteration, unless otherwise ordered by the Commission, and determine a liquidation value as of May 13, 1991 as described in this Application;

d. That after determining the shareholder-equity value which exists in Fidelity Bankers, if any, that an order be entered retiring and cancelling all shares in Fidelity Bankers in accordance with the terms of the Rehabilitation Plan;

e. That upon a finding that such a claims filing period and Bar Date will be in the best interests of contract-holders and other creditors, the Commission set a Bar Date for the filing of all claims against the receivership estate which begins at the time that the Commission approves this Application and which ends upon the expiration of ninety days from that date, and further authorize the Deputy Receiver to promulgate forms for the proof of such claims. That all claims filed after the Bar Date be precluded from sharing in the assets of Fidelity Bankers through Hartford, the Fidelity Bankers' Trust, or otherwise, and that all claims be filed in accordance with the terms, recommendations, and clarifications listed in this Application;

f. That all assets, liabilities and claims not transferred to Hartford be retained by Fidelity Bankers or the Fidelity Bankers Trust as provided under the Rehabilitation Plan. That an order be entered limiting Hartford's liability to those policies and claims of Fidelity Bankers which are identified and assumed under the terms of the Rehabilitation Plan. That the Commission authorize and establish the Fidelity Bankers Trust for purposes of protecting the interests of contract-holders and creditors and administering the orderly transfer of policies and contracts from Fidelity Bankers to Hartford, as well as handling the claims of certain contract-holders and other creditors, that the Deputy Receiver shall be appointed trustee of the Trust, and that the Trust shall operate under the protection of the Commission, under the direct control of the Deputy Receiver as determined by the Commission under the terms of the Trust. That the Trust be administered for the benefit of Fidelity Bankers' contract-holders and other creditors whose liabilities and claims have not been assumed by Hartford, that the Trust be funded in accordance with the terms of the Rehabilitation Plan, and that the Fidelity Bankers Trust be used as a means to satisfy the claims of contract-holders and other creditors given the current sufficiency of Fidelity Bankers' assets to pay in full all policyholder claims, such that no Guaranty Association from any state will be necessary to cover claims from any policyholder;

g. That all claims and liabilities filed against Fidelity Bankers before the Bar Date be adjudicated and meritorious claims paid, to the extent of available assets, by the Fidelity Bankers Trust according to the Rehabilitation Plan and the priority scheme outlined herein, with any residual assets of the Trust to be paid to Fidelity Bankers under the terms of the Rehabilitation Plan after satisfaction of the Trust's claims and liabilities. That an order be entered limiting Fidelity Bankers' liability to those policies and claims of Fidelity Bankers which are identified and assumed under the terms of the Rehabilitation Plan, except that such claims and liabilities not assumed may be presented to the Fidelity Bankers Trust as provided herein. More specifically, the Trust's assets should be distributed, after reserving for the payment of costs and expenses of administering the Fidelity Bankers Trust, in the following priority order: (a) priority wages as provided in Section 38.2-1514 of the Virginia Code; (b) non-voidable perfected secured claims to the extent of the value of their security; (c) taxes owed to the United States and any other debt owed to any other person, including the United States, who by the laws of the United States are entitled to priority; (d) policyholder claims apportioned without preference; and (e) other creditors; and

h. That any finding, decision, judgment, order or decree of the Commission made and entered in connection with this Application should be deemed a final judgment, order or decree of the Commission as described in, and be governed by, Commission Rules 8:9 and 8:10.

FOR SUCH OTHER AND FURTHER RELIEF, whether at law or equity, general or special, to which the Deputy Receiver may show himself to be justly entitled.

DATED this 21st day of April, 1992.

Respectfully submitted,

 

STEVEN T. FOSTER,
Deputy Receiver
Fidelity Bankers Life Insurance Co.,
in Receivership for Conservation
and Rehabilitation

 

PATRICK H. CANTILO,
Special Deputy Receiver
Fidelity Bankers Life Insurance Co.,
in Receivership for Conservation
and Rehabilitation

\s\

Howard W. Dobbins (Va. Bar No. 5394)
William H. Schwarzschild, III (Va. Bar No. 15274)
Sarah Hopkins Finley (Va. Bar No. 21658)

Williams, Mullen, Christian & Dobbins
Central Fidelity Bank Building
Two James Center
1021 East Cary Street
Post Office Box 1320
Richmond, Virginia 23210-1320
(804) 643-1991
(804) 783-6456 (FAX)
 

of counsel:
Harold B. Gold, Esquire
Randolph N. Wisener, Esquire
Mark A. Land, Esquire

Rubinstein & Perry
1011 Boulder Springs Drive
Richmond, Virginia 23225
(804) 323-1011
(804) 323-5667 (FAX)
Attorneys for Applicant

COMMONWEALTH OF VIRGINIA
STATE CORPORATION COMMISSION